(Edgar Glimpses Via Acquire Media NewsEdge)
This report contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act
of 1934. These statements relate to future events or our future financial
performance. In some cases, you can identify forward-looking statements by
terminology such as "may" "should," "expect," "plan," "anticipate," "believe,"
"estimate," "predict," "potential" or "continue," the negative of such terms, or
other comparable terminology. These statements are only predictions. Actual
events or results may differ materially from those in the forward-looking
statements as a result of various important factors. Although we believe that
the expectations reflected in the forward-looking statements are reasonable,
they should not be regarded as a representation by CoroWare, Inc., or any other
person, that such expectations will be achieved. The business and operations of
CoroWare, Inc. are subject to substantial risks, which increase the uncertainty
inherent in the forward-looking statements contained in this report.

BACKGROUND
CoroWare, Inc ("CoroWare" or "the Company") is a public holding company whose
principal subsidiary, CoroWare Technologies, Inc. ("CTI"), has expertise in
information technology consulting, mobile robotics, and affordable
telepresence. Through its subsidiary, the Company delivers custom engineering
services, hardware and software products, and subscription services that benefit
customers in North America, Europe, Asia, Australia and the Middle East. Their
customers span multiple industry sectors and are comprised of universities,
software and hardware product development companies, and non-profit
organizations. The company also maintains a Near Shore practice which is
comprised of multiple subcontracting companies with whom the company maintains
close working relationships. Through these relationships, the Company is able to
provide services in South America.

COROWARE TECHNOLOGIES, INC.

CTI is a software professional services company with a strong focus on
Information Technology integration and robotics integration, business automation
solutions, and unmanned systems solutions to its customers in North America and
Europe.

CTI's expertise includes the deployment and integration of computing platforms
and applications, as well as the development of unmanned vehicle software and
solutions for customers in the research, commercial, and homeland security
market segments. CTI shall continue to offer its high value software systems
development and integration services that complement the growing trend in
outsourced software development services in Asia, Latin America, and Eastern
Europe.

CoroWare Technologies comprises three separately managed lines of business:
· CoroWare Business Solutions: IT and lab management; business intelligence,
software architecture, design and development; content delivery; partner and
program management.

· Robotics and Automation: Custom engineering such as visualization, simulation
and software development; and mobile robot platforms for university,
government and corporate researchers..

The Company's revenues are principally derived from standing contracts that
include Microsoft (partner management and IT professional services), a European
auto manufacturer (simulation software custom development), and other customers
whose product development groups require custom software development and
consulting companies. Existing contract revenues vary month by month based on
the demands of the clients. The Company's collaboration effort is in the early
stages of growth and will require additional working capital to compete
effectively against new entrants in this rapidly growing
market.

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--------------------------------------------------------------------------------RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2011:
During the three-month period ended September 30, 2012 (the "2012 Period")
revenues were $224,136 compared to revenues of $389,089 during the three-month
period ended September 30, 2011 (the "2011 Period"). Our revenues were 42.4%
lower compared to the previous year as customers continued to delay spending on
software development projects. As well, a significant number of
videoconferencing and mobile robot product shipments were postponed in the third
quarter of 2012 until the fourth quarter of 2012.

Cost of revenues was $179,098 for the 2012 Period compared to $289,945 for the
2011 Period. Cost of revenues represents primarily labor and labor-related costs
in addition to overhead costs. Gross profit on these 2012 revenues amounted to
$45,038 (20.1% gross profit percentage) compared to $99,144 (25.5% gross profit
percentage) for the 2011 Period.

Research and development was $12,309 (5.5% of gross revenues) for the 2012
Period compared to $20,372 (5.2% of gross revenues) in the 2011 Period, and
comprised development of mobile robot and billing mediation application
software.

Operating expenses were $250,181 during the 2012 Period compared to $274,784
during the 2011 Period. General and Administration expenses were reduced by 2.7%
to $177,636 in the 2012 Period compared to $182,588 for the 2011 Period as the
Company continued to reduce its executive compensation and public company
expenses. Sales and marketing expenses were reduced by 16.8% to $57,236 in the
2012 Period compared to $68,824 for the 2011 Period as the Company further
refined sales compensation plans to bring them in line with the Company's cost
of sales objectives. Loss from operations was $205,143during the 2012 Period
compared to $175,640 in the 2011 Period.

Total other expense was $6,294,769 during the 2012 Period compared to Total
other expense of $2,760,329 in the 2011 Period. Other income (expense) is
comprised primarily of derivative income and amortization of debt discount and
deferred finance costs. Derivative expense in the 2012 Period was $6,228,894
compared to Derivative expense of $2,561,925 in the 2011 Period. Keeping the
number of shares constant, the liability associated with the embedded conversion
features increases as our share price and volatility increases and, likewise,
decreases when our share price and share price volatility decreases. Derivative
income (expense) displays the inverse relationship. During the 2012 Period, the
share price decreased ($.0028 at September 30, 2012 versus $0.02 at June 30,
2012) with consistent volatility, which resulted in a significant change in the
calculated Monte Carlo values. The derivative expense in the 2012 Period is
primarily due to fair value adjustments to the embedded conversion
features. Interest expense for the three month 2012 Period is $157,303 compared
to $198,518 for the three month 2011 Period. The debt discount was amortized
using the effective interest method. Under this method, the amount of
amortization increases exponentially as the underlying carrying value of the
amortized debt increases.

Net Loss for the 2012 Period was $6,499,912 compared to a net loss of $2,935,969
for the 2011 Period.

Basic weighted average shares outstanding were 23,689,883 shares during the 2012
Period compared to 4,705,474 shares in the 2011 Period. There is no fully
diluted calculation for the 2012 Period or the 2011 Period as the effect would
be anti-dilutive.

NINE MONTHS ENDED SEPTEMBER 30, 2012 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2011:
During the nine-month period ended September 30, 2012 (the "2012 Period"),
revenues were $910,655 compared to revenues of $1,277,358 during the nine-month
period ended September 30, 2012 (the "2011 Period"). Our revenues were 28.7%
lower compared to the previous year as customers delayed spending on software
development projects, IT consulting engagements, software development projects,
and capital expenditures until later in the calendar year. As well, a
significant number of videoconferencing and mobile robot product shipments were
postponed in the third quarter of 2012 until the fourth quarter of 2012.

Cost of revenues was $595,459 for the 2012 Period compared to $849,347 for the
2011 Period. Cost of revenues represents primarily labor and labor-related costs
in addition to overhead costs. Gross profit on these 2012 revenues amounted to
$ 315,196 (34.6% gross profit percentage) compared to $428,011 (33.5% gross
profit percentage) for the 2011 Period.

17
--------------------------------------------------------------------------------Research and development was $57,391 (6.3% of gross revenues) for the 2012
Period compared to $106,562 (8.3% of gross revenues) in the 2011 Period.

Operating expenses were $775,375 during the 2012 Period compared to $1,036,048
during the 2011 Period. General and Administration expenses were reduced by
21.6% to $516,109 in the 2012 Period compared to $658,083 for the 2011 Period as
the Company reduced its executive compensation and public company auditing
expenses. Sales and marketing expenses were reduced by 23.3% to $192,875 in the
2012 Period compared to $251,322 for the 2011 Period as the Company further
adjusted sales compensation plans to bring them in line with the Company's cost
of sales objectives. Loss from operations was $460,179during the 2012 Period
compared to $608,037 in the 2011 Period.

Total other expense was $7,497,690 during the 2012 Period compared to other
expense of $3,590,548 in the 2011 Period. Other income (expense) is comprised
primarily of derivative income and amortization of debt discount and deferred
finance costs. Derivative expense in the 2012 Period was $6,568,388 compared to
derivative expense of $3,021,883 in the 2011 Period. Keeping the number of
shares constant, the liability associated with the embedded conversion features
increases as our share price and volatility increases and, likewise, decreases
when our share price and share price volatility decreases. Derivative income
(expense) displays the inverse relationship. During the 2012 Period, the share
price decreased ($.0028 at September 30, 2012 versus $0.02 at December 31, 2011)
with consistent volatility, which resulted in a significant change in the
calculated Monte Carlo values. The derivative expense in the 2012 Period is
primarily due to expense recognized in connection with redemptions on various
debentures during the Period. Interest expense for the nine month 2012 Period is
$527,021 compared to $567,600 for the nine month 2011 Period. The debt discount
was amortized using the effective interest method. Under this method, the amount
of amortization increases exponentially as the underlying carrying value of the
amortized debt increases.

Net Loss for the 2012 Period was $ ($7,497,690) compared to a net loss of
$4,198,586 for the 2011 Period.

Basic weighted average shares outstanding were 14,126,220 during the 2012 Period
compared to 2,503,438 in the 2011 Period. There is no fully diluted calculation
for the 2012 Period or the 2011 Period as the effect would be anti-dilutive.

LIQUIDITY AND CAPITAL RESOURCES
At September 30, 2012, we had current assets of $167,391, current liabilities of
$18,471,226, negative working capital of $18,303,835 and an accumulated deficit
of $34,964,256. For the nine months ending September 30, 2012, we had net cash
flows used in operating activities of ($88,837), net cash flows used in
investing activities of ($1,371), and net cash flows provided by financing
activities of $92,613.

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We will need to obtain additional capital in order to expand operations and
become profitable. In order to obtain capital, we may need to sell additional
shares of our common stock or borrow funds from private lenders. There can be no
assurance that we will be successful in obtaining additional funding. We will
still need additional capital in order to continue operations until we are able
to achieve positive operating cash flow. Additional capital is being sought, but
we cannot guarantee that we will be able to obtain such investments. Financing
transactions may include the issuance of equity or debt securities, obtaining
credit facilities, or other financing mechanisms. If we do not obtain additional
capital, we may cease operations.

However, even if we are able to raise the funds required, it is possible that we
could incur unexpected costs and expenses, fail to collect significant amounts
owed to us, or experience unexpected cash requirements that would force us to
seek alternative financing. Furthermore, if we issue additional equity or debt
securities, stockholders may experience additional dilution or the new equity
securities may have rights, preferences or privileges senior to those of
existing holders of our common stock. If additional financing is not available
or is not available on acceptable terms, we will have to curtail our operations.

OFF-BALANCE SHEET ARRANGEMENTS
We do not have any off balance sheet arrangements that are reasonably likely to
have a current or future effect on our financial condition, revenues, results of
operations, liquidity or capital expenditures.